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Guy Verhofstadt: David Davis' post-Brexit customs union plan is 'a fantasy'

Guy Verhofstadt: David Davis' post-Brexit customs union plan is 'a fantasy'
3 min read

A top Brussels official has dismissed the UK Government's plans to strike a "temporary" customs deal with the EU after Brexit as "a fantasy".


Guy Verhofstadt, the European Parliament's Brexit co-ordinator, said no deal could be struck on the UK's future trading relationship with the bloc until agreement had been reached on Britain's divorce bill and citizens' rights.

His dramatic intervention came just hours after David Davis had unveiled the Government's idea –and even before the 14-page document setting out the full proposals had been published.

Mr Verhofstadt's remarks are a bitter blow for Mr Davis, who has insisted that his plans would be good for both Britain and the EU, and avoid a cliff edge for businesses in April, 2019.

Under the proposals, the UK would be allowed to negotiate trade deals with non-EU countries, something it is banned from doing while it is still a member.

The document published by the Department for Exiting the EU this morning said the Government "seeks a new customs arrangement that facilitates the freest and most frictionless trade possible in goods between the UK and the EU and allows us to forge new trade relationships with our partners and around the world".

RED TAPE

But the practical suggestions on how leaving the customs union would work in practice indicate that businesses face a massive increase in red tape.

The paper acknowledged "there will remain an increase in administration compared with being inside the EU customs union", which allows member states to trade with one another without any tariffs.

One suggestion would be for British firms to pay whichever tariff rate is highest between the UK and the EU, before claiming a refund.

The document said: "Businesses in supply chains would need to be able to track goods or pass the ability to claim a repayment along their supply chain in order to benefit.

"We acknowledge this is an innovative and untested approach that would take time to develop and implement."

Labour sources said the proposals were "bureaucratic" and potentially unworkable.

IRELAND

Ministers are expected to publish another document tomorrow on how the UK plans to deal with the border between the Republic of Ireland – which will remain in the EU – and Northern Ireland after Brexit.

In the customs paper published today, the Government said: "We must avoid a return to a land border, and trade and everyday movements across the land border must be protected as part of the UK-EU deal.

"The Government has made clear that the answer to avoiding a hard border between Northern Ireland and Ireland cannot be to impose a new customs border between Northern Ireland and Great Britain. We should avoid an approach that would create new barriers to doing business within the UK."

Mr Davis said: "The approaches we are setting out today will benefit both the EU and UK and avoid a cliff-edge for businesses and individuals on both sides.

"The way we approach the movement of goods across our border will be a critical building block for our independent trade policy. An interim period would mean businesses only need to adjust once to the new regime and would allow for a smooth and orderly transition.

"The UK is the EU’s biggest trading partner so it is in the interest of both sides that we reach an agreement on our future relationship. The UK starts from a strong position and we are confident we can deliver a result that is good for business here in the UK and across the EU."

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